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Push for diversity brings rush of business for executive headhunters

Pressure is building on companies to appoint more female and minority directors


Financial Times | December 22, 2020




The Financial Times article, "Push for diversity brings rush of business for executive headhunters​," quoted Russell Reynolds Associates Consultant Margot McShane on the uptick in demand for diverse board directors and how to find them. The article is excerpted below.

Pressure to speed up glacial progress on adding more women and minorities to corporate boards has brought a rush of new business for specialist headhunters.

After Nasdaq announced in December that companies listed on its exchange should have at least one woman and one member of an under-represented minority on their boards, companies have called in recruiting firms, often asking them to broaden their searches beyond the usual pool of former top executives.

Some businesses also want help with embedding diversity in board succession plans and advice on how to tackle conversations about ethnicity and sexual orientation at the highest corporate level.

In 2008, only 8 per cent of board members at Russell 3000 companies identified their race as non-white, according to advisory group Institutional Shareholder Services. By 2020, after more than a decade of corporate pledges to improve diversity in a country where 40 per cent of the population is not white, the figure had risen to only 12 per cent.
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A diversity drive by US investors, exchanges and state legislators will force companies to widen their networks, said Margot McShane, a board and CEO hiring specialist at Russell Reynolds.

“There’s a race for talent” in public companies, private equity-backed groups and pre-IPO businesses alike, she said. “The highest quality diverse candidates — everyone’s calling them. Boards are going to have to look outside the obvious suspects as well as those within their networks because there aren’t enough of them.”

Her own firm had seen “a dramatic uptick” in demand for more diverse lists of board candidates since this summer’s Black Lives Matter protests, she said. It has also had many more calls since Nasdaq said listed companies should have at least two “diverse”directors.

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Push for diversity brings rush of business for executive headhunters